Loss Reduction from Negative Cost Material Flow Cost in the Powdered Beverage Production Process with the Application of Material Flow Cost Accounting Technique

Abstract

Application of Material Flow Cost Accounting (MFCA) is one technique that can reduce loss from using material in production process by analyzing loss in negative cost. This study aims to study the flow of material in each activity, and analysis material flow cost in Powder Beverage production process. Including analysis loss and approach guidelines for the loss reduction from material flow cost that is negative cost in the process with the application of Material Flow Cost Accounting technique. By collecting information from 22 main providers with observation, and in-depth interview with open-ended questions.  Data were analyzed with application of Material Flow Cost Accounting technique, Statistical Package Programs, Pareto Diagram and Column Chart. The material flow study found that each activity had difference loss, and material flow cost   negative cost were 2.00 %. It also found that losing from negative cost material flow cost was in Premix activity. The application of material flow cost accounting technique could reduce 2.83 % of loss or 17,400.20 Baht per powder beverage capacity 9,381.59 kg. After the reduction of loss, the material flow cost in the production process has decreased more than 83 Million Baht per year. The study result allowed entrepreneur to realize that the negative cost material flow cost did not generate revenue, which will be policy suggestion for efficiency and effectiveness of material flow cost accounting in future.